Investing.com -- Morgan Stanley downgraded Joby Aviation (NYSE:JOBY) to “Equal-weight” from “Overweight” and cut its price target to $7 from $10, with a more cautious macroeconomic view and rising risks from potential trade tariffs that could impact the aerospace supply chain.
The firm said it continues to prefer aftermarket aerospace names over original equipment manufacturers given their stronger pricing power and ability to mitigate tariff disruptions.
“We do not expect Joby’s stock to outperform in a slower growth, risk-off macro environment,” analysts wrote in a 1Q25 aerospace sector preview.
While reaffirming long-term optimism around electric vertical take-off and landing (eVTOL) aircraft, Morgan Stanley (NYSE:MS) flagged elevated near-term execution risks for Joby, a pre-revenue company still working toward FAA certification for both its aircraft and manufacturing process.
The recent policy on trade may weigh meaningfully on growth, analyst at Morgan Stanley believes, pointing to broader macro risks that could suppress corporate confidence and investor appetite for early-stage, high-risk names like Joby.
Still, the firm noted that the Dubai Airshow in November 2025 could serve as a meaningful catalyst for the stock.
“We remain positive on the long-term eVTOL opportunity and view Joby’s recent progress toward aircraft certification positively,” analyst said.
Joby is attempting to lead the emerging urban air mobility market, which Morgan Stanley estimates could reach a total addressable market of $1 trillion by 2040 and $9 trillion by 2050. But analysts highlighted challenges including certification, regulation, adoption rates, and operational execution.
Morgan Stanley also cut price targets across several aerospace names, including Hexcel (NYSE:HXL) to $50 from $61, Textron (NYSE:TXT) to $71 from $82, and AerCap to $101 from $112, while reiterating its preference for aftermarket-exposed stocks such as Transdigm, RBC Bearings (NYSE:RBC), and Howmet.
